Rumors Are Yeast For Pillsbury Stock

Pillsbury Co. stock jumped $3.37 a share Thursday amid rumors that the firm was about to be taken over by the likes of Nestle S.A. or Beatrice Co.

In composite New York Stock Exchange trading, Pillsbury closed at $45.37. A Beatrice spokesman had no comment on the rumor. Nestle also declined to comment.

Vice President Johnny Thompson said Pillsbury would not comment on whether there had been offers for the company or why the price had jumped.

L. Craig Carver, an analyst with Dain Bosworth Inc. in Minneapolis, said he has heard the Nestle and Beatrice rumors, adding that the Beatrice rumor made ``some sense.``

``Don Kelly (Beatrice chairman) has pulled off a lot of deals, and Kelly is prone to do a lot of crazy things,`` Carver said.

Last month, Kelly sold E-II Holdings Inc. to American Brands Inc. for $1.14 billion after taking a stake in the tobacco and consumer products company. This month, Beatrice announced it was selling its Tropicana orange juice unit to Seagram & Co. Ltd. for $1.2 billion.

Carver said that Pillsbury could sell for as high as $4 billion, a price that would beat the $5 billion to $10 billion range Kelly has mentioned for possible deals. Bosworth speculated that if a food company bought Pillsbury it would sell its Burger King subsidiary, which could go for as much as $1 billion, he said.

Nestle, the Swiss conglomerate, has been mentioned countless times as a possible suitor of large food companies in the last several years, but it has remained a spectator as such food giants as General Foods Corp., Nabisco Inc. and Anderson, Clayton & Co. were swallowed up by Philip Morris Companies Inc., Reynolds Industries Inc. and Quaker Oats Co. respectively.

Speculation has swirled this month about Minneapolis-based Pillsbury since its chief executive, John M. Stafford, resigned under fire and was replaced by his mentor and predecessor, William H. Spoor.

Stafford`s resignation was the latest in a series of Pillsbury moves that have grabbed analysts` attention.

Last month in Florida, Stafford sent analysts scurrying to the phones when he said their earnings estimates for this year were 30 cents a share too optimistic.

Most analysts at the Consumer Analysts of New York meeting in St. Petersburg had been projecting that the firm would have operating earnings of about $2.80 a share.